Filed: Mar. 13, 2014
Latest Update: Mar. 13, 2014
Summary: ORDER TO SHOW CAUSE WHY THIS ACTION SHOULD NOT BE REMANDED FOR LACK OF SUBJECT MATTER JURISDICTION DEAN D. PREGERSON, District Judge. Defendant removed this action on the basis of federal question jurisdiction under the Employee Retirement Income Security Act of 1974 ("ERISA"). The court orders the parties to show cause why this action should not be remanded for lack of subject matter jurisdiction. District courts have "original jurisdiction of all civil actions arising under the Constitution
Summary: ORDER TO SHOW CAUSE WHY THIS ACTION SHOULD NOT BE REMANDED FOR LACK OF SUBJECT MATTER JURISDICTION DEAN D. PREGERSON, District Judge. Defendant removed this action on the basis of federal question jurisdiction under the Employee Retirement Income Security Act of 1974 ("ERISA"). The court orders the parties to show cause why this action should not be remanded for lack of subject matter jurisdiction. District courts have "original jurisdiction of all civil actions arising under the Constitution,..
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ORDER TO SHOW CAUSE WHY THIS ACTION SHOULD NOT BE REMANDED FOR LACK OF SUBJECT MATTER JURISDICTION
DEAN D. PREGERSON, District Judge.
Defendant removed this action on the basis of federal question jurisdiction under the Employee Retirement Income Security Act of 1974 ("ERISA"). The court orders the parties to show cause why this action should not be remanded for lack of subject matter jurisdiction.
District courts have "original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. Ordinarily, determining whether a particular case arises under federal law turns on the "well-pleaded complaint" rule. Franchise Tax Bd. Of State of Cal. v. Construction Laborers Vacation Trust for S. Cal., 463 U.S. 1, 9 (1983). As an exception to the this rule, a state-law cause of action that "relates to" an ERISA benefit plan may be preempted under ERISA § 514(a), and may be removed under the complete preemption doctrine. See Marin Gen. Hosp. v. Modesto & Empire Traction Co., 581 F.3d 941, 945 (9th Cir. 2009). Here, while Plaintiff's original Complaint did not facially assert an ERISA cause of action, it was removed because, according to Defendant, its state-law claims were encompassed by ERISA § 502(a). See id. Plaintiff's First Amended Complaint ("FAC") did not change any of the substantive allegations of Plaintiff's original Complaint. Rather, the FAC merely changed the first cause of action to seek wrongful denial of benefits "pursuant to ERISA." (FAC ¶ 39.)
In Marin, the Ninth Circuit concluded that the plaintiff's causes of action were not completely preempted because they were based upon an oral contract between an insurance provider and a health care provider, and that contract gave rise to a legal duty independent of ERISA. See Marin, 581 F.3d at 944-50. Following Marin, courts in this district have found that complete preemption does not apply where a complaint can reasonably be read to allege that there is an independent obligation that is not based upon an obligation under an ERISA plan. See Orthopedic Specialists of S. Cal. v. Aetna Life Inc. Co., No. CV 10-6246 PA (JEMx), 2010 WL 3504916 at *2 (C.D. Cal. 2010); see also Coast Plaza Doctors Hosp. v. Ark. Blue Cross and Blue Shield, No. CV 10-06927 DDP(JEMx), 2011 WL 3756052, at *3 (C.D. Cal. 2011)("where a third-party medical provider sues an ERISA plan based on contractual obligations arising directly between the provider and the ERISA plan, no ERISA-governed relationship is implicated and the claim is not preempted")(internal quotation and citation omitted).
In this case, the FAC alleges that pursuant to a telephone conversation between the parties, Plaintiff understood that the medical procedures would be "covered." (FAC ¶¶ 17, 20.) Plaintiff suggests that the benefits owed are pursuant to the plan, yet Plaintiff itself is unclear on what the actual terms of the plan are. (FAC ¶¶ 21-22.) As in Marin, Defendant allegedly paid Plaintiff some amount, but not the entire amount owed. (FAC ¶ 29), Marin, 581 F.3d at 948. Thus, it is unclear whether the claims arise under an ERISA plan or an independent contractual.
Accordingly, the court orders the parties to each file a brief, not to exceed ten pages, within 14 days of the date of this Order, showing why this action should not be remanded for lack of jurisdiction. Parties should also deliver a courtesy copy to chambers, Room 244-J, Second Floor, 312 N. Spring Street, Los Angeles.
IT IS SO ORDERED.